What is Bitcoin?
Author: Elle Miller
Let’s get down to basics. What is Bitcoin?
Bitcoin is a cryptocurrency, which means it is a digital currency that uses cryptography to secure transactions, control the scarcity of its availability (bitcoin mining), and verify the transfer of assets from one owner to another.
Bitcoin was invented by an unknown person or group of people using the pseudonym Satoshi Nakamoto as early as 2008. At first, Bitcoin was believed to be predominantly used for illegal activities such as buying drugs on the black market. However, over time Bitcoin has become more mainstream and is now one of the best cryptocurrency investments.
The value of Bitcoin has continuously grown as much as 200% year on year despite its volatility. It’s the top-performing asset class throughout the past 10 years and it is projected to still be the best in the next 10 years. Coined as digital gold, it outperformed the growth of cash, stocks, gold, bonds, and any other asset class available in the market.
Being the first-ever decentralised cryptocurrency, Bitcoin paved the way for the whole industry and is still the most dominant. Why? It is so much more than just a digital currency.
It is the first-ever revolutionary decentralised monetary system.
Bitcoin is decentralised, meaning that no single entity controls it and no individual can be identified as responsible for its creation or operation. Instead, Bitcoin relies on open-source software that anyone can use to participate in the network by contributing resources (computing power) to help facilitate transactions across the network and secure it against hackers who want to try to steal any Bitcoin or compromise the network in any way.
Bitcoin is censorship-resistant - this means you can use Bitcoin all over the world no matter the geo-political climates of the different countries you want to transact with.
Bitcoin transactions are anonymous. There is no identity attached to the transaction, so you can send money anonymously, which benefits privacy and security.
Bitcoin is cheaper to transact with than other currencies. Traditional banks and services like Western Union and MoneyGram are very expensive - especially if you want to send money places often or have large amounts to send or have to send money overseas. Bitcoin transactions cost less than any form of traditional money transfer including, bank transfers, credit card fees, and international wire transfers. This makes it an attractive option for international payments due to lower transfer fees and delays in receiving funds from overseas banks or businesses.
The main value of Bitcoin comes from its potential to be used as a form of payment for goods and services. Importantly, Bitcoin as a payment method allows people who traditionally do not have access to banking to participate in the world market. One day, there is a big possibility that Bitcoin will be the predominant monetary system and could be worth much more than what it is today.
The most exciting part of Bitcoin is that it is a scarce resource. There are only and will only ever be 21 million Bitcoin tokens. This finite amount allows the value to continuously increase as the demand for it increases.
To discover how to best include Bitcoin in your investment strategy easily and safely, we’ve prepared a course for you to understand the inner workings of Bitcoin, why you should invest, and the best way to do it. Start here at decryptingcrypto.com.